Will Cryptocurrencies Ever Overtake Cash?

09/01/2017 11:58 am ET

It’s been a crazy year for bitcoin. Not only has it comfortably surpassed the $4,000 mark, it’s now accepted by a variety of major online retailers – even AirBnB are expected to add a “bitcoin accepted here” to their header later this year. Yep, cryptocurrencies have definitely exceeded all expectations, majorly shaking up the financial sector and causing turmoil among various governments due to tax loopholes. If you were there at the beginning – one of those “naive” investors – you’ve no doubt had the last laugh, unless you made the mistake of cashing in early!

What’s most shocking about bitcoin, however, isn’t the amount of millionaires it has created since its inception, but that the experts state that the value is nowhere near the market cap, which could exceed $100,000 within the next decade! With such high predictions – which of course, must be taken with a hefty fistful of salt – it’s difficult to ignore the potential of cryptocurrencies, shunning them as a passing fad. But then, $4,000 is a lot of money to invest, especially when there are no guarantees. For most of us it’s simply too late and too expensive to get in the game.

Investing in Cryptocurrencies Might Still Be Viable

It’s worth noting that bitcoin isn’t the only cryptocurrecy on the market. In fact, there are now over 900 in circulation. While the majority of them will fail before they make any impact on the world, some of them will take off, perhaps reaching the same heights as bitcoin. And those who had the confidence (or ignorance!) to invest early could again find themselves laughing all the way to the bank.

There are a select few cryptocurrencies that are currently attracting interest and don’t cost the earth, including Ethereum, which is gaining quite a lot of buzz and stands at $335 as of August 2017. While it’s not even close to bitcoin in terms of financial value, it’;s reacting to the marketplace in the same manner that bitcoin did in the early days. But will it continue to do so? Only time will tell...

Cryptocurrencies Are Only Going to Gain Prominence

According to the Harvard Business Review, “Blockchain technology will have a similar impact on the financial services industry to what the Internet had to media.” If this prediction comes true then the state of worldwide banking will be very different, very soon. Perhaps within the next decade. While this may seem far-fetched, it’s really not that hard to believe.

As more and more people not only invest in cryptocurrencies, but use them to make everyday payments, our preconception of what money is is changing. Additionally, some countries, particularly in the Nordic regions, are increasingly distancing themselves from hard cash already. In fact, in Sweden and Denmark it’s not uncommon to find shops and restaurants that don’t accept cash at all and only take digital payment processors. The Danish government have even made plans to phase out cash altogether within the next decade. While this has little to do with blockchain technology, it’s proof that many of us now regard “physical cash” as a burden.

The Blockchain Rectifies Problems With Traditional Banking

Blockchain technology is decentralized, meaning no single person or entity has control over it, not a government, business or even a third party regulator. This means that there are no processing fees, no prerequisites for opening an account, and instantaneous transfers to anyone, anywhere in the world. Spectre, the disruptive platform that removes financial brokers out of the equation and decentralizes and tokenises the liquidity pool against which traders trade, is an example of the decentralization benefits of the blockchain, and why many traders are choosing cryptocurrencies over more “tradtional” investments, such as stocks and bonds.

At present the main reason why blockchain technology hasn’t been embraced on a greater commercial level is quite simply down to trust and understanding. People don’t know what cryptocurrencies are, how to attain them, where they can be used, and whether or not they can be trusted. But like any new technology all it will take is for a few legitimate, trusted retailers to embrace them and their value will increase. Fundamentally, cryptocurrencies will eventually overtake cash, that’s no longer up for debate; but when it will happen... that’s anyone’s guess.